SCOTUS Hears Argument to Settle TCPA ATDS Definition

TCPA ATDS
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The United States Supreme Court (“SCOTUS”) held oral arguments this week on Facebook, Inc. v. Duguid.  The Justices are being asked to provide the definitive answer on the TCPA’s ATDS definition.  For years, what dialing equipment qualifies as an automatic telephone dialing system (“ATDS”) for purposes of the Telephone Consumer Protection Act (“TCPA”) has been a moving target.  Following this week’s oral arguments, SCOTUS is at long last poised to definitively answer the question.

How might the Supreme Court decide the TCPA ATDS definition based on the oral argument?

It is often a fool’s errand trying to predict how SCOTUS might rule on a given issue.  However, the oral argument was largely promising for those hoping that the Court will use this opportunity to reign in the ever-expanding reach of the TCPA. 

Much of the argument concerned mundane issues of statutory construction and interpretation.  Nevertheless, the Justices, through their questions, provided meaningful tea leaves on how SCOTUS might decide the issue. For example, some of the Justices asked questions suggesting that they believe the TCPA to be obsolete, indicating that they believe the entire statute should be stricken.  Suggesting that such a drastic solution would be the easier and more preferable one likely came as a surprise to most observers who anticipated that Court would simply approach this case to clarify the definition of an ATDS.  Nevertheless, some of the questions indicated a strong inclination among the Justices for this remedy:  

Justice Thomas:  “So technology has changed and moved along very rapidly. And don’t you think it’s rather odd that we are applying a statute that’s almost anachronistic, if not vestigial and . . . to modern technology like Facebook and instant messaging, et cetera? Don’t you think that at some point there’s a — there’s at least a sense of futility?”

Justice Alito: “[Some believe that] courts should have the power to declare statutes obsolescent and obsolete. And if . . . we had that power, this statute might be a good candidate.”

Justice Sotomayor: “I’m wondering if the issue is less with . . . interpretation and more so with the TCPA being outdated. When the Act was passed nearly 30 years ago, smartphones didn’t even exist. Even today, it still references pagers . . . .”

Similarly, many of the Justices were also concerned with the practical effects of a broad ATDS interpretation given technological developments over the last 30 years.  Specifically, fear of exposing ordinary smartphone users to crushing TCPA underlined possible hostility to the broad ATDS definition favored by the plaintiffs’ bar.

Justice Sotomayor: “[I]f we rule [for the plaintiff], the logical consequence is that every cell phone owner would be subject to the harsh criminal and civil penalties of the [T]CPA.”

Cause for Concern From the Justices’ Questions?

Nonetheless, it should not be assumed that a favorable ruling for the marketing industry is a sure thing.  The Justices struggled with the awkward wording of the statute itself.  Specifically, the Justices appeared to suggest that as a matter of common sense Congress could not have intended to require equipment to have the capacity to store numbers using a random or sequential number generator.   

Justice Alito: “Does it make any sense to speak about storing a list of telephone numbers using a random or sequential number generator?  . . . Unless you can explain how a generator was used in the very process of storing the numbers, I think you have a problem.”

The Supreme Court will most likely render its decision in the spring of 2021.  When it does, it will bring an end not only a lengthy battle for Facebook, Inc., but also then even longer fight to establish a fixed definition of what an autodialer is for TCPA purposes.    

Complying with TCPA ATDS Rules

SCOTUS’s forthcoming ruling will provide welcome clarity for marketers who for years have operated in a regulatory environment complicated by the changing contours of the TCPA ATDS definition.  The clarity will afford businesses a sense of certainty to guide its compliance practices for the foreseeable future.  Ideally, the clarity provided by SCOTUS will significantly narrow the TCPA’s reach, limiting the recent onslaught of lawsuits filed by class action plaintiffs emboldened by an expansive ATDS definition.  Interested parties will have to wait to see whether the ideal scenario comes to fruition.  Until such time as SCOTUS renders its decision, it remains critical for businesses work closely with experienced telemarketing counsel to review all practices and procedures prior to launching any campaign.  

If you need to review your telemarketing practices and procedures, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

The material contained herein is provided for information purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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Photo by Paweł Czerwiński on Unsplash

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David O. Klein

David O. Klein

David Klein is one of the most recognized attorneys in the telemarketing, technology, Internet marketing, sweepstakes and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

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